(Kitco News) – Cryptocurrency prices continued to climb higher in early trading on Tuesday while stocks trended lower and gold was flat, suggesting that the next phase of the crypto bull market may be gearing up.
Data provided by TradingView shows that Bitcoin (BTC) bulls extended their momentum from Monday and rallied the top crypto to a high of $67,960 shortly after the U.S. market opened, its highest price since late July.
BTC/USD Chart by TradingView
“The price of Bitcoin traded above $66.5K for a while on Tuesday, matching the high of 30 July,” noted Alex Kuptsikevich, senior market analyst at FxPro. “This is a very nominal break above the previous high and an attempt to consolidate above the resistance of the descending channel.”
“An important driver is the continued optimism in the US equity markets,” Kuptsikevich added. “Barring any sudden bouts of profit-taking, Bitcoin could consolidate the breakout from the multi-month downtrend. The potential first target of the new bull rally looks to be the area of historical highs as it approaches $74K, with a more distant target of $80K by the end of the year.”
The highest probability for the next coming weeks/months is that we will enter the next and last wave of the bull run to hit all time high and enter price discovery pic.twitter.com/ROztRQ72jQ
— Bitcoinsensus (@Bitcoinsensus) October 15, 2024
The rising fortunes of King Crypto were foreshadowed by a spike in inflows into spot BTC exchange-traded funds (ETFs). Data from Farside Investors shows that the assets under management of the 11 ETFs increased by nearly $556 million on Monday.
Further evidence of the heating up bull market is the fact that open interest for cash-margined Bitcoin futures contracts hit a new all-time high of 384,000 BTC ($25.5 billion) on Monday, surpassing the November 2022 peak of 376,000 BTC, when Bitcoin traded near $16,000, according to Glassnode.
On-chain data analytics firm CryptoQuant also noted that along with a new ATH in Bitcoin open interest, “funding rates have attained their highest positive level since August, suggesting that most of the open interest is favoring long positions in Bitcoin.”
“This upward trend in the derivatives market indicates a growing influx of liquidity and increased attention in the cryptocurrency space,” CryptoQuant analyst EgyHash said. “The rise in funding rates further points to a bullish sentiment among traders.”
The rising bullishness was reflected in the Crypto Fear & Greed Index, which is now in ‘Greed’ territory after spending the last month in neutral territory and reached 65, its highest level since late July.
According to Geoff Kendrick, global head of digital assets research at Standard Chartered, several factors are fueling the building momentum for Bitcoin – including a steepening in the U.S. Treasury yield curve, renewed market interest in spot bitcoin exchange-traded funds, and the rising odds of a Donald Trump victory in the upcoming U.S. presidential election – which could push it toward a pre-election price of $73,800.
“For Bitcoin the combined factors mean a bleed up towards the all-time high of $73,800 looks likely pre-election,” Kendrick said in a note on Tuesday. He added that Bitcoin and other digital assets have “finally started to rise” in response to the steepening of the 2s10s yield curve, which followed Thursday’s stronger-than-expected CPI data.
Kendrick noted that the odds of a Donald Trump victory have risen to 56.3%, according to the Polymarket prediction platform, while the probability of a Republican sweep stands at 39%. With Republicans seen as the more positive party regarding the future of crypto, Kendrick said this could be playing a significant role in helping to drive the upward momentum in Bitcoin, with the election only three weeks away.
He also highlighted the surge in ETF inflows and increased activity in the derivatives market as critical factors driving Bitcoin’s recent rise.
Observing the increased activity around Bitcoin call options at the $80,000 strike price for the December 27 expiry on the Deribit crypto derivatives exchange, Kendrick highlighted that “Another 1,500 bitcoin was added to the open interest of the $80,000 call in the past week,” and suggested that institutional investors are positioning for a significant move upward in the medium term.
At the time of writing, Bitcoin has retraced its early morning surge to $67,960 and now trades at $65,710, a decline of 0.42% on the 24-hour chart.
